1. Field of the Invention
The present invention relates to the delivery of online lending services and, more specifically, to a system for the delivery of online lending services by an application service provider using an internet web site that seamlessly integrates the efforts of any mortgage origination source with a lender network, thereby facilitating the flow of information between all traditional participants in a mortgage transaction.
2. Description of the Background
Online clearinghouses, lender networks, and other loan origination sources (“lead sources”) for various types of loans are fast gaining in popularity. For mortgage loans, Lending Tree, Inc. is a well known example. By visiting the Lendingtree.com website, consumers can fill out a single application form online which contains basic information about the purpose of the loan and the applicant's creditworthiness. The information is passed to participating banks and lender institutions which pre-screen the application to determine if the application meets their general requirements, and then if it does they review the application and may offer a “prequalification” to the consumer inclusive of specific loan terms—interest rate, closing costs, etc. Typically, within 24 hours of the loan application, the applicant will receive as many as four “prequalifications” to choose from for each application submitted. The banks are able to set their own standards about what sort of applications they wish to review. Using criteria the banks have supplied, Lending Tree automatically forwards the lead to four institutions best suited to make the particular loan. Lending Tree charges the member banks a “transmission fee” per each application that the lender decides to review. After reviewing the application, the lender may respond to the consumer with a specific offer. If the consumer accepts the offer and the loan actually closes, Lending Tree additionally charges the lender a “closed loan fee”. Presently, Lending Tree charges banks $9 for each consumer lead, bringing $36 total if the lead goes to four banks, plus an extra $300 to $800 if the lead evolves into an actual mortgage loan.
Last year, more than 1.4 million consumers applied for loans via Lending Tree, enabling the site's lenders to book more than $12 billion in loans from its leads. Moreover, there are other loan origination sites. E-LOAN is Lending Tree's closest competitor, originating $7.3 billion in loans last year.
Leads generated by lead sources are passed on to “loan origination sources” such as traditional mortgage brokers and brokerage websites. These loan origination sources make contact with clients, solicit applications, and pre-qualify applicants. After prequalification, the loan originators will submit the loan application to one or more lenders (or a lender network such as LendingTree.com) in return for an origination fee. Many loan origination sources use origination source software such as Calyx® Point® to give themselves instant access to resources, products, and services they need for originating loans, including interfaces and direct connections to lenders and mortgage service companies. The Point software offers a complete platform for managing all aspects of the loan process, including marketing, prequalification, origination, automated underwriting, processing, and closing.
In the case of most mortgage lead sources, loan origination sources and lender networks (including Lending Tree and Point), the businesses are data intensive and each requires a hosting server for the website, a large database and associated software, and very secure “back-end” network technology including encryption, to protect the data transmitted between the consumers, the loan origination server facility, and lenders. Differing database formats prevent the seamless passing of data from the lead source to the loan origination source, and on to the lender or lender network, and much of the data needs to be retyped. Moreover, there is no inherent tracking of an application throughout the process, and no provision for allowing dynamic changes to the application information while keeping all involved parties apprised of any action taken by the another party. With existing mortgage origination software such as Point, once the consumer completes the loan qualification form the data from the form is used to populate a database. The consumer can never again retrieve the application in its original format. This is because the applications are written in Extensible Markup Language (XML), a universal format for structured documents and data on the Web. XML loses its formatting when updated, transmitted and recalled on various systems. The consumer applicant is deprived of the ability to review their own loan application throughout the application process.
Due to the foregoing difficulties, there is a growing demand by online mortgage loan origination sources as well as lead sources to outsource some of the functions involved in their respective processes. For example, data warehousing, software maintenance, etc. are functions that can easily be outsourced.
Unfortunately, outsourcing compels a change from the existing “back-end” architecture in which the applications and databases reside on separate servers both at the lead source and at the loan origination source.
It would be greatly advantageous to provide a 2-tiered Application Service Provider (ASP) architecture by which front-end clients can securely communicate with the database (back-end). An ASP is a vendor that supplies software applications and/or software services to consumers over the Internet. An ASP rents or leases application software primarily to small and mid-sized businesses (customers). The customer's software applications and data are supported and maintained by the ASP on servers in the ASP's secure centrally managed server facility (data center). The ASP also handles the network administration. Customers access their applications and related data via the Internet, Virtual Private Networks (VPN), dedicated leased lines (e.g., a T-1 line), or dial-up modem connections.
The ASP concept allows a company to rent powerful end-to-end application solutions for significantly less than buying, deploying and supporting them in-house. Additionally, data center costs are eliminated or significantly reduced, and the company can focus on its core competencies rather than technology. However, it is not a straightforward proposition to develop an ASP model for the mortgage lending industry. A successful architecture must facilitate the flow of information throughout the mortgage lending process beginning with the consumer completion of a loan application (lead generation) and through submission to loan origination sources and lenders, and back, all while allowing dynamic changes to the application information, and all while keeping all involved parties apprised of any action taken by the another party. This would entail a particular ASP architecture, plus exhaustive data management and communication protocols. Rather than storing data in conventional databases in traditional extensible mark-up language (XML), it is envisioned that a more fixed cross-platform document format such as the Portable Document Format (PDF) would accomplish a more favorable result in such a model.
Adobe® Portable Document Format (PDF) is the open standard for electronic document distribution. PDF is a universal file format that preserves all of the fonts, formats, images, graphics, and color of any source document no matter what application and platform was used to create it. Anyone can then open the document across a broad range of hardware and software, and it will look exactly as the author intended, with layout, fonts, links, and images intact. PDF solves a number of problems inherent in transferring files from one platform or application to another. Often a recipient of a file cannot open it because their machine does not run the software application used to create the file. With PDF files, anyone anywhere can open the file. Formatting, fonts and graphics might be lost because of platform, software and version incompatibilities. A PDF file always displays exactly as created, even if created by a foreign software application, operating system or platform. Documents do not always print correctly due to printer/software limitations. PDF is printer independent. PDF files can be published and distributed anywhere: in print, attached to E-mail, on corporate servers, posted on Web sites, or on CD-ROM.
In light of the foregoing, it would be greatly advantageous to provide an ASP topology for online lending service providers which facilitates the flow of information throughout the mortgage lending process beginning with the consumer completion of a loan application and through submission to lenders and back, all in open Portable Document Format PDF to allow dynamic changes to the application information, and all while electronically notifying all involved parties of any action taken by the another party.